Notes to Accounts of GTN Industries Ltd.

Mar 31, 2024

1.15 PROVISIONS AND CONTINGENCIES

A provision is recognised when there is a present legal or constructive obligation as a result of past event; it
is probable that an outflow of resources will be required to settle the obligation, and in respect of which a
reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the
current best estimates.

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company
from a contract are lower than the unavoidable costs of meeting the future obligations under the contract.

A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that

may probably not require an outflow of resources or an obligation for which the future outcome cannot be
ascertained with reasonable certainty. When there is a possible or a present obligation where the likelihood
of outflow of resources is remote, no provision or disclosure is made.

1.16 CASH AND CASH EQUIVALENTS

Cash and Cash equivalents include cash and Cheque in hand, bank balances, demand deposits with banks
and other short-term highly liquid investments that are readily convertible to known amounts of cash & which
are subject to an insignificant risk of changes in value where original maturity is three months or less.

1.17 CASH FLOW STATEMENT

Cash flows are reported using the indirect method where by the profit before tax is adjusted for the effect of the
transactions of a non-cash nature, any deferrals or accruals of past and future operating cash receipts or
payments and items of income or expenses associated with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the company are segregated.

1.18 BORROWING COST

General and specific borrowing costs that are directly attributable to the acquisition, construction or production
of qualifying assets are capitalized as a part of Cost of that assets, during the period till all the activities
necessary to prepare the Qualifying assets for its intended use or sale are complete during the period of time
that is required to complete and prepare the assets for its intended use or sale. Qualifying assets are assets
that necessarily take a substantial period of time to get ready for their intended use or sale.

Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.19 EARNINGS PER SHARE

Basic EPS is arrived at based on net profit after tax available to equity shareholders to the weighted average
number of equity shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential
dilutive equity shares unless impact is anti-dilutive.

1.20 SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating
Decision Maker (CODM).

The Company has identified its Managing Director as CODM which assesses the operational performance
and position of the Company and makes strategic decisions.

1.21 RECENT ACCOUNTING PRONOUNCEMENTS

The Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended
March 31,2024, MCA has not notified any new standards or amendements to the existing standards applicable
to the Company.

(a) The Company has only one class of issued Equity Shares having a par value of Rs. 10/- per share. Each
Shareholder is eligible for one vote per share held.In the event of liquidation, the Equity Shareholders are
eligible to receive the residual assets of the Company after distribution of all preferential amounts,in proportion
to their shareholding.

b) The Company has only one class of Preference Shares, i.e., 0.01 % Non-Convertible Redeemable Preference
Shares (''NCRPS'') having a par value of Rs. 100 per share. These preference shares have been recognised
as Compound Financial Instruments in accordance with Ind-AS 109 - Financial Instruments. Accordingly,
the liability component of the preference shares issued has been disclosed in Note 14- Non-Current Liabilities-
Financial Liabilities-Borrowings.

32. RISK MANAGEMENT - FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s financial risk management is an integral part of how to plan and execute its business strategies.
The company''s activity expose it to market risk, liquidity risk , commodity risk and credit risk. In order to
minimise any adverse effects on the financial performance of the company, derivative financial instruments,
such as foreign exchange forward contracts, foreign currency option contracts are entered to hedge certain
foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives
are used exclusively for hedging purposes and not as trading or speculative instruments. The Company''s
financial risk management policy is set by the Managing Director and governed by overall direction of Board
of Directors of the Company.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change
in the price of a financial instrument. The value of a financial instrument may change as a result of changes
in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect
market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments
including investments and deposits , foreign currency receivables, payables and loans and borrowings.

A. CREDIT RISK

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as
agreed. To manage this, the Company periodically assess financial reliability of customers, taking into
account the financial condition, current economic trends, and analysis of historical bad debts and ageing
of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has
been a significant increase in credit risk on an ongoing basis through each reporting period. To assess
whether there is a significant increase in credit risk the Company compares the risk of default occurring on
asset as at the reporting date with the risk of default as at the date of initial recognition. It considers
reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counterparty

iii) Financial or economic conditions that are expected to cause a significant change to the counter
party''s ability to meet its obligations

iv) Significant increase in credit risk on other financial instruments of the same counterparty

The company catogarises financial assets based on the assumptions, inputs and factors specific to
the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit
risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality
assets, very high credit risk; Doubtful assets, credit-impaired.

Financial assets are written off when there is no reasonable expectations of recovery, such as a
debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or
receivable for write off when a debtor fails to make contractual payments greater than one year past
due. Where loans or receivables have been written off, the Company continues engage in enforcement
activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in
profit or loss.

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or
at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as
settlement management. In addition, processes and policies related such risk are overseen by senior
management. Management monitors the Company''s net liquidity position through rolling forecasts on the
basis of expected cash flows.

C. MARKET RISK- INTEREST RATE RISK

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate
because of changes in market interest rates. In order to optimize the Company''s position with regards to
interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive
corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial
instruments in its total portfolio.

D. MARKET RISK- FOREIGN CURRENCY RISK.

The Company operates internationally and portion of the business is transacted in several currencies and
consequently the Company is exposed to foreign exchange risk through its sales and services in overseas
and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly
higher in comparison to its imports. Foreign currency exchange rate exposure is partly balanced by exports
of goods and prudent hedging policy.

a) Principal Raw Material for Company''s products is cotton which is an agricultural commodity and thus,
seasonal in nature. Company sources its raw material requirement from across the globe. Domestic
market prices are also generally remains in sync with international market price scenario.

b) Volatility in raw cotton prices, currency fluctuation of Rupee vis-a-vis other prominent currencies coupled
with demand-supply scenario in the world market and domestic market affect the effective price and
availability of cotton for the Company. Company effectively manages and deals with availability of
material as well as price volatility through:

1. Widening its sourcing base

2. Appropriate contracts and commitments

3. Well planned procurement & inventory strategy

33. CAPITAL RISK MANAGEMENT

A The Company''s objectives when managing capital are to

• safeguard their ability to continue as a going concern, so that they can continue to provide
returns for shareholders and benefits for other stakeholders

• maintain an optimal capital structure to reduce the cost of capital

The Company monitors capital on the basis of the following Debt Equity ratio:

34. DISCLOSURE PURSUANT TO IND AS - 19 "EMPLOYEE BENEFITS"

i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit
retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum
payment to vested employees on retirement (subject to completion of five years of continuous employment),
death, incapacitation or termination of employment that are based on last drawn salary and tenure of
employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting
date and the Company makes annual contribution to the gratuity fund administered by life Insurance
Companies under their respective Group Gratuity Schemes.

a) Figures in brackets relate to previous year.

b) Related party relationship is as identified by the management and relied upon by the auditors.

c) No amounts in respect of related parties have been written off/ written back during the year

d) Terms and conditions for sales and purchases: All sale and purchase transactions with the related
parties are in the ordinary course of business based on normal commercial terms, conditions and market
rates with the related parties. For the year ended 31st March, 2024, the Company has not recorded any
loss allowances for the transaction between the related parties.

e) All the material transactions stated above with related parties are on arm''s length basis.

39. Based on the “Management Approach” as defined in Ind AS 108 - Operating Segments, the Company is
engaged in the business of Textile Products and as such has only a Single Reportable Business Segment.
The Company has all its production facilities and all other assets located in India. Sales to external customers
comprise export sales of Rs. 7,095.84 lacs (Previous Year Rs. 12447.86 lacs) and local sales of Rs. 11441.74
lacs (Previous Year Rs. 18941.11 lacs).

1. Working Capital Loans are secured by a first charge by way of hypothecation of the current assets of the
Company, both present and future and by way of first charge on fixed assets, ranking paripassu, inter-se
among working capital banks. These Working Capital facilities are further guaranteed by Managing
Director and also secured by pledge of Equity Shares to the extent of 51% of promoters'' holding with
voting rights ranking paripassu with Working Capital lenders.

41. The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post¬
employment benefits has been published in the Gazette of India. However, the date on which the Code will
come into effect has not been notified. The Company will assess the impact of the Code and recognise the
same when the Code becomes effective.

42. The title in respect of self-constructed buildings and title deeds of all other immovable properties, disclosed
in the financial statements included under Property, Plant and Equipment are held in the name of the
Company as at the balance sheet date.

43. No Loans or Advances have been granted to promoters, directors, KMPs and the related parties during the
year ended 31st March, 2024 and 31st March, 2023.

44. The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.

45. The Company has not been declared a wilful defaulter (as defined by RBI Circular) by Any bank or financial
Institution or other lender.

46. The Company does not have any transactions with companies struck off under Section 248 of the Companies
Act, 2013 or Section 560 of Companies Act, 1956.

47. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

48. The Company does not have any subsidiaries and hence, the provisions of clause (87) of Section 2 of the Act
read with the Companies (Restriction on number of Layers) Rules, 2017 are not applicable to the Company.

49. The Company has not entered into scheme of arrangement during the year and previous year.

50. Utilisation of Borrowed funds and share premium:

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company
shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by

or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

53. The Company does not have any undisclosed income which is not recorded in the books of account that has
been surrendered or disclosed as income during the year (previous year) in the tax assessments under the
Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

54. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

55. Previous year''s figures have been re-grouped/re-classified wherever required to conform to current year''s
classification. All figures of financials has been rounded to nearest lacs to rupees.

As per our attached report of even date For and on behalf of the Board

^For Lodha & Co. v. raghU RAM _M K PATODIA

Char^tered.Accoun-anso, ^{Chief Financial Officer} Chairman and Managing Director

FRN - 301051 E/E300284 (DIN No 00004752)

_{R P BARADIYA} P. PRABHAKARA RAO

Rj ^BARADIYA Company Secretary & M.R. VIKRAM

^Patner Compliance Officer Independent Director

M. No. 44101 (M.No. 08974) (DIN No. 00008241)

Place: Mumbai _{Dl u} . . . ^RAJUL ^KOTHARI

Dat_e : 28_-05_-2024 ^Place: ^Hyderabad Independent Woman Director

^{: Da}t^{e :} 28-05-2024 (din No. 06903721)

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Mar 31, 2023

Provisions, contingent liabilities and contingent assets - The amendment specifies that the ‘cost of fulfilling'' a contract comprises the ‘costs that relate directly to the contract''. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2022, although early adoption is permitted.

c) Ind AS 103 - Business combinations - The amendment adds a new exception in Ind AS 103 for liabilities and contingent liabilities.

d) Ind AS 109 - Financial instruments - The amendment clarifies which fees an entity includes when it applies the ‘10%’ test in assessing whether to derecognise a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf.

The Company is in the process of evaluating the impact of these amendments.

Footnotes : Nature and purpose of reserves Amalgamation Reserve:

Amalgamation Reserve was created at the time of implementation of scheme of Amalgamation dated 01.04.1994. It is a non-distributable reserve in accordance with the provisions of the Act.

Securties Premium:

Securities Premium is created due to premium on issue of shares. This reserve can be utilised in accordance with the provisions of the Act.

Retained Earnings:

The balance in the Retained Earnings primarily represents the surplus after payment of dividend and transfer to reserves. It includes gain on recognition of equity component of compound financial instruments and revaluation of property, plant and equipment, in earlier years.

33. FINANCIAL INSTRUMENTS

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

34. RISK MANAGEMENT - FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s financial risk management is an integral part of howto plan and execute its business strategies. The company''s activity expose it to market risk, liquidity risk , commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts, foreign currency option contracts are entered to hedge certain foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.

A. CREDIT RISK

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counterparty.

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations

iv) Significant increase in credit risk on other financial instruments of the same counterparty.

The company catogarises financial assets based on the assumptions, inputs and factors specific to the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality assets, very high credit risk; Doubtful assets, credit-impaired.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company.The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than one year past due. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receiable due. Where recoveries are made, these are recognized in profit or loss.

B. LIQUIDITY RISK

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

C. MARKET RISK- INTEREST RATE RISK

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Exposure to interest rate risk

(Rs. in lacs)

E. COMMODITY RISK

a) Principal Raw Material for Company’s products is cotton which is an agricultural commodity and thus, seasonal in nature. Company sources its raw material requirement from across the globe. Domestic market prices are also generally remains in sync with international market price scenario.

b) Volatility in raw cotton prices, currency fluctuation of Rupee vis-a-vis other prominent currencies coupled with demand-supply scenario in the world market and domestic market affect the effective price and availability of cotton for the Company. Company effectively manages and deals with availability of material as well as price volatility through:

1. Widening its sourcing base

2. Appropriate contracts and commitments

3. Well planned procurement & inventory strategy

35. CAPITAL RISK MANAGEMENT

A The Company’s objectives when managing capital are to

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders

• maintain an optimal capital structure to reduce the cost of capital

The Comoanv monitors capital on the basis of the followina Debt Eauitv ratio: . .

36. DISCLOSURE PURSUANT TO IND AS - 19 "EMPLOYEE BENEFITS"

Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by life Insurance Companies under their respective Group Gratuity Schemes.

Notes:

a) The issues of litigation pertaining to Central Excise/lncome Tax are based on interpretation of the respective Law & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention. As such no material impact on the financials of the Company is envisaged.

b) Other issues are either in ordinary course of business or not of substantial nature and management is reasonably confident of their positive outcome. Management shall deal with them judiciously and provide for appropriately, if any such need arises.

39 COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and are not provided for: ? 1548.02 lacs (Previous Year ^1619 lacs); net of advances of ^ 180.36 Lacs (Previous Year ^ 169.10 lacs).

40. DISCLOSURE ON RELATED PARTY TRANSACTIONS

a) Names of related parties and description of relationship:

i) Parties where control exists:

GTN Engineering (India) Limited - Holding Company

ii) Associate and other related parties with whom transaction have been entered during the course of business:

JEL Finance & Investment Limited M/s. Patcot Co.

M/s. Perfect Cotton Co.

M/s. Standard Cotton Corporation

M/s Megha Investments Private Limited

M/s Emkaypee Investments Private Limited

M/s Modesty Finance & Investments Private Limited

ii) Key Managerial Personnel :

Shri M.K. Patodia - Chairman & Managing Director Shri V. Raghuram-Chief Financial Officer Shri P. Prabhakara Rao-Company Secretary

41. Based on the “Management Approach” as defined in Ind AS 108 - Operating Segments, the Company is engaged in the business of Textile Products and as such has only a Single Reportable Business Segment. The Company has all its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 12447.86 lacs (Previous Year Rs. 25083.13 lacs) and local sales of Rs. 18941.11 lacs (Previous Year Rs. 23007.52 lacs).

Note:

1. Term Loans from banks and Financial Institutions are secured as first pari passu charge basis on immovable assets by way of equitable mortgage and first charge on hypothecation of movable fixed assets of the Company viz. property, plant and equipment, both present and future, situated at all the locations of the Company and further secured by way of second charge on current assets. These loans are guaranteed personally by Managing Director and also secured by pledge of equity shares to the extent of 51% of promoters'' holding with voting rights ranking paripassu with working capital lenders.

2. Working Capital Loans are secured by a first charge by way of hypothecation of the current assets of the Company, both present and future and by way of second charge on fixed assets, ranking paripassu, interse among working capital banks.These loans/Non-fund based facilities are further guaranteed by Managing Director and also secured by pledge of Equity Shares to the extent of 51 % of promoters'' holding with voting rights ranking paripassu with Term lenders.

43. The Board of Directors of the Company in their meeting held on March 2, 2021 resolved,to sell certain Property, Plant and Equipment situated at the Spinning Unit of GTN Industries Limited (the ''Seller''), located at Chitkul village, Patancheru and other locations in the State of Telangana for an aggregate consideration of Rs. 7300 Lakhs. During the year, the Company has completed the sale of Property, Plant and Equipment.

44. The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and postemployment benefits has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and recognise the same when the Code becomes effective.

45. The title in respect of self-constructed buildings and title deeds of all other immovable properties, disclosed in the financial statements included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet date.

46. No Loans or Advances have been granted to promoters, directors, KMPs and the related parties during the year ended 31st March, 2023 and 31st March, 2022.

47. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

48. The company has not been declared a wilful defaulter (as defined by RBI Circular) by Any bank or financial Institution or other lender.

49. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

50. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

51. The Company does not have any subsidiaryies and hence, the provisions of clause (87) of Section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017 are not applicable to the Company.

52. The Company has not entered into scheme of arrangement during the year and previous year.

53. Utilisation of Borrowed funds and share premium:

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

56. The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

57. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

58. Previous year''s figures have been re-grouped/re-classified wherever required to conform to current year''s classification.All figures of financials has been rounded to nearest lacs to rupees.

As per our attached report of even date For and on behalf of the Board

For Lodha & Co. M.K. PATODIA

Chartered Accountants p PRABHAKARA RAO Chairman and Managing Director

FRN - 301051E Company Secretary (DIN No. 00004752)

R.P. BARADIYA ^(MN°'' ⁰⁸⁹⁷⁴⁾

Patner V. RAGHU RAM M.R. VIKRAM Independent

M No 44101 Chief Financial Officer (DIN No. 00008241) Director

Place: Mumbai Place: Hyderabad RAJUL KOTHARI Independent

Date : 26-05-2023 Date : 26-05-2023 (DIN No. 06903721) Woman Director

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Mar 31, 2016

1. During the year, the Company had announced a Voluntary Retirement Scheme - 2015 (‘Scheme’) for its personnel at Medak and Doubling Units in terms of which the Company has paid an amount of Rs. 941.99 lacs which has been disclosed as an exceptional item.

2. a) In the opinion of the Management, assets other than Fixed Assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

b) Certain balances in Trade Payables, Other Current Liabilities, Trade Receivables and Loans and advances are subject to confirmations, reconciliation and adjustments. In the opinion of the Management, adjustments, if any, on such confirmations/reconciliations will not have material impact on the loss for the year.

3. Contingent Liabilities and commitments (to the extent not provided for):

4. Contingent Liabilities

5. Disputed Drawback and Excise Duty - Rs.18.69 lacs (Previous Year Rs. 19.36 lacs).

6. Disputed Income Tax Interest up to the date of demand - Rs. 38.92 lacs (Previous Year Rs. 38.92 lacs)

7. Cross Subsidy Charges - Rs. 122.08 lacs (Previous Year Rs. Nil)

8. Disputed Other dues (Gram Panchayat Tax, FSA charges, Non-agricultural Tax, Sewerage Cess etc.): Rs.164.52 lacs (Previous Year Rs. 177.06 lacs).

9. Commitments

10. Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 91.34 lacs (Previous Year Rs. 91.34 lacs); net of advances of Rs. 8.99 lacs (Previous Year Rs. 8.99 lacs).

11. Arrears of Preference Dividend, including Dividend Distribution Tax, Rs. 30.83 lacs (Previous Year Rs. 99.91 lacs).

12. The Company’s pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

13. Employee Benefit Plans

The following table set out the status of the gratuity plan as required under AS 15:

*The Company has entered into a Group Gratuity Scheme with Life Insurance Corporation of India (’LIC’) and the plan assets of the Company are being maintained by LIC.

With respect to compensated absences (leave entitlements), liability recognized in the balance sheet as on March 31, 2016 is Rs 21.65 lacs (Previous Year Rs.21.21 lacs).

14. In terms of Accounting Standard 17, the Company operates materially only in one business segment viz., yarn and has its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 10552.04 lacs (Previous Year Rs. 22122.67 lacs) and local sales of Rs. 17243.64 lacs. (Previous Year Rs. 17031.52 lacs).

15. The Company had revalued its Land and Building as on March 31, 2015 based on the valuation made by an independent firm of valuers. Accordingly, the original costs of the above assets as on March 31, 2015 have been revalued on market value / replacement cost basis using standard indices after considering the obsolescence and age of individual assets.

16. The revalued amounts, net of withdrawals, of Rs. 7640.55 lakhs for Land and Buildings and Rs. 1061.72 lakhs for Plant & Machinery and Electrical Installations (Previous Year Rs. 7640.55 lakhs and Rs. 1335.33 lakhs, respectively) remain substituted for the historical cost in the gross block of fixed assets.

17. During the previous year, pursuant to the Shareholders’ approval and in accordance with the Business Transfer Agreement dated 16^th July, 2013, entered into between the Company and GTN Engineering (India) Limited, an associate, (‘transferee’), the Company had completed the process of hive-off of its Yarn Processing Unit located at Shadnagar, Telanagana and Knitting Unit located at Medak, Telangana (jointly referred to as ‘units’) as a going concern on “slump sale” basis on 4^th September, 2014 for a consideration of Rs. 3050 lacs resulting into a profit of Rs. 99.04 lacs. The sale consideration was received in the following manner:

18. Pursuant to the hive-off, the bank accounts / facilities, agreements, licenses and certain immovable properties of the Units are in the process of being transferred in the name of the Transferee. Further, the Company is in the process of getting the charges modified / released in respect of secured loans transferred.

19. The figures of the previous year include the income and expenditure of the Units up to 3^rd September, 2014 and thus, the figures of the current year are not comparable with those of the previous year.

20. Previous year’s figures have been regrouped and rearranged wherever necessary so as to conform to the current year’s presentation.

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Mar 31, 2015

GTN Industries Limited has its Registered Office at Chitkul village, Patancheru Mandal, Medak Dist., Telangana. It is engaged in the business of Spinning, Doubling, Processing and Knitting of Yarn. As more fully explained in Note 26B(1) below, the Company has sold its Yarn Processing and Knitting Unit during the year on a "slump sale" basis. The Company at present has its production facilities in the state(s) of Telangana and Maharashtra.

B. Other Notes

1. Pursuant to the Shareholders' approval and in accordance with the Business Transfer Agreement dated 16th July, 2013, entered into between the Company and GTN Engineering (India) Limited, an associate, ('transferee'), the Company has completed the process of hive-off of its Yarn Processing Unit located at Shadnagar, Telangana and Knitting Unit located at Medak, Telangana State (jointly referred to as 'units') as a going concern on "slump sale" basis on 4th September, 2014 for a consideration of Rs. 3050 lakhs resulting into a profit of Rs. 99.04 lakhs. The sale consideration has been received in the following manner:

a) The hive-off has resulted in transfer of current assets and liabilities pertaining to the units as at 4th September, 2014, to the Transferee, detailed breakup whereof is being furnished hereinbelow:

b) Pursuant to the hive-off, the bank accounts / facilities, agreements, licenses and certain immovable properties of the Units are in the process of being transferred in the name of the Transferee. Further, the Company is in the process of getting the charges modified / released in respect of secured loans transferred.

c) In view of the hive-off, the figures of the current year are not comparable with those of the previous year.

2. a) In the opinion of the Management, assets other than Fixed Assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

b) Certain balances in Trade Payables, Other Current Liabilities, Trade Receivables and Loans and advances are subject to confirmations, reconciliation and adjustments. In the opinion of the Management, adjustments, if any, on such confirmations/ reconciliations will not have material impact on the Loss for the year.

3. a) Contingent Liabilities and commitments (to the extent not provided for):

i) Contingent Liabilities

* Disputed Drawback and Excise Duty: Rs.19.36 lacs (Previous Year Rs. 19.36 lacs).

* Disputed Income Tax Interest Rs. 38.92 lacs (Previous Year Rs. 38.92 lacs).

* Disputed Other dues (Gram Panchayat Tax, FSA charges, Non-agricultural Tax, Sewerage Cess etc.) : Rs.177.06 lacs (Previous Year Rs. 117.18 lacs).

ii) Commitments

* Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 91.34 lacs (Previous Year Rs. 233.51 lacs); net of advances of Rs. 12.82 lacs (Previous Year Rs. 29.24 lacs).

* Arrears of Preference Dividend, including Dividend Distribution Tax, Rs. 99.91 lacs (Previous Year Rs. 16.56 lacs)

b) The Company's pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

4. The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter into any such instruments for trading or speculative purposes.

i) The following are the contracts entered into by the Company and outstanding at the year end:

As a matter of prudence, the Company does not recognize mark to market foreign exchange gain on derivative contracts entered into to hedge the foreign currency risk of future transactions and outstanding as at the year end.

5.The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

6. Disclosure in respect of related parties pursuant to Accounting Standard 18:

(A) List of related parties:

Related parties with whom the Company entered into transactions during the year:

i) ASSOCIATES Purav Trading Limited

GTN Engineering (India) Limited

JEL Finance & Investment Limited

M/s.Patcot Co.

M/s. Perfect Cotton Co.

M/s. Standard Cotton Corporation

ii) KEY MANAGEMENT PERSONNEL AND ENTERPRISES (HAVING COMMON KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES)

Key Management Personnel

Shri M.K. Patodia - Chairman & Managing Director

Shri C.R. Gang-Chief Financial Officer

Shri P. Prabhakara Rao-Company Secretary

Relatives of Key Management Personnel and their entities

Smt. Bimla Devi Chowdhary-Sister of Shri M.K. Patodia Smt. Sharada Devi Chowdhary-Sister of Shri M.K. Patodia

7. No amounts in respect of related parties have been written off /written back during the year.

8. Figures in bracket represent previous year's figures.

9. Related parties are as identified by the management and relied upon by the auditors.

10. Employee Benefit Plans

The following table set out the status of the gratuity plan as required under AS 15:

11. In terms of Accounting Standard 17, the Company operates materially only in one business segment viz., yarn and has its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 22122.67 lacs (Previous Year Rs. 34914.16 lacs) and local sales of Rs. 17031.52 lacs. (Previous Year Rs. 19782.84 lacs).

12. a) Certain Land, Buildings, Plant & Machinery and Electrical Installations were revalued as on 31st March, 1993 on the basis of reports of approved valuer on market value /replacement cost basis using standard indices after considering the obsolescence and age of individual assets.

b) The Company has again revalued its Land and Buildings as on March 31, 2015 based on the valuation made by an independent firms of consulting engineers and Government approved valuers. Accordingly, the original costs of the above assets as on 31st March, 2015 have been restated on market value / replacement cost basis using standard indices after considering the obsolescence and age of individual assets. The resultant increase in net book value arising on revaluation amounting to Rs. 4478.02 lakhs has been transferred to Revaluation Reserve Account during the year ended 31st March, 2015.

c) The revalued amounts, net of withdrawals, of Rs. 8511.58 lacs for Land and Buildings and Rs. 1335.33 lacs for Plant & Machinery and Electrical Installations (Previous Year Rs. 422.08 lacs and Rs. 1423.27 lacs, respectively) remain substituted for the historical cost in the gross block of fixed assets.

13. Loans & Advances in the nature of loans to employees (disclosure pursuant to clause 32 of the listing agreement):

Note: Figures in the brackets represent previous year's figures.

14. Previous year's figures have been regrouped and rearranged wherever necessary so as to conform to the current year's presentation.

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Mar 31, 2013

GTN Industries Limited has ils Registered Office al Chilkul Village, Palancheru Mandal, Medak DisLrict, Andhra Pradesh. It is engaged in the business of Spinning, Doubling, Processing and Knitting of Yarn. It has production facilities in the stale of Andhra Pradesh and Maharashtra.

1) a) In the opinion of the Management, assets other than Fixed assets and Non-current investments have a value

on realization in the ordinary course of business al least equai to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary. b) Certain balances in Trade Payables, Trade Receivables and Short Term Loans and advances are subject to confirmations, reconciliation and adjustments. In the opinion o! the Management, adjustments, if any, on such confirmations/reconciliations will not have material impact on the Loss for the year.

2) CDR-Cell vide its letler dated 28lh March, 2013 communicated the approval of Rework Package for Restructuring of Debt stipulating the Cut-Off Date (COD) as July 1, 2012. As per the Package, the lenders are to be compen- sated by way of upfronl payment of Rs. 296 lakhs on account of Net Present Value (NPV) of sacrifice. Pending approval and implementation of the Package, there were delays in repayrnenl of dues to Banks and Financial Inslilulions during the relevant period.

3) Exceptional Items comprise of:

i) Rs, 296 lacs being NPV of sacrifice for the entire repayment period of term loans covered by ''Rework

Package'' approved under CDR System. ii) Rs. 453 lacs towards provision /payment of Fuel Surcharge Adjustment (FSA) imposed by Central Power

Distribution Company of A.R Limited for earlier years,

4) The Company has recognized deferred tax asset on the basis of export/local sale orders on hand resulting in adequate future profits. Thus, management is virtually certain that sufficient future taxable income would be available against which brought forward business losses and unabsorbed deprecialion would be setoff.

5) a) Contingenl Liabilities and commitments (to the extent not provided for):

i) Contingent Liabilities

Disputed Drawback and Excise Duty (including interest up to the date of demand): Rs.22,04 lacs (Previous Year Rs. 22.04 lacs). Others: Rs.103 lacs (Previous Year Rs. 105.32 lacs). ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and are not provided lor: Rs. 305.11 lacs (Previous Year Rs. 241.51 lacs); net of advances of Rs. 27.83 lacs (Previous Year Rs. 21.47 lacs). b) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transaclions. The Company does not enter into any such instruments for trading or speculative purposes. i) The foilowing are the contracts entered into by the Company and outstanding al the year end:

6) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act have not been given.

7) Disclosure in respect of related parties pursuant to Accounting Standard 16: A) LIST OF RELATED PARTIES:

Related parlies with whom Company entered into Iransactions during the year: i) Associates

Perfect Knitters Limited

Imperial Garments Limited

Purav Trading Limited

GTN Engineering (India) Limited ii) Key Management Personnel and Enterprises

(Having Common Key Management Personnel or their relatives)

Key Management Personnel

Shri M.K, Patodia - Chairman & Managing Director

Enterprises / Entities having common Key Management Personnel

Patcot Company

Perfect Collon Co.

Standard Cotton Corporation Mi) Relatives of Key Management Personnel and their entities

Smt, Bimla Devi Chowdhary - Sisler

Sml. Sharada Devi Chowdhary-Sister

8) In terms of Accounting Standard 17, the Company operates materially only in one business segment viz., yarn and has its production facilities and all other assets located in India. Sales to external cuslomers comprise export sales ol Rs. 23501.47 lacs (Previous Year Rs, 21767,61 lacs) and local sales of Rs. 17754.19 lacs(Previous Year Rs. 14948.07 lacs).

9) a) Certain Land, Buildings, Plant & Machinery and Electrical Installations were revalued as on 31H March 1993

on the basis of reports of approved valuer on market value / replacement cost basis using standard indices after considering the obsolescence and age of individual assets,

b) The revalued amounts (net of withdrawals) remaining substituted for the historical cost in the gross block of fixed assets are;

10) Previous year''s figures have been regrouped and rearranged wherever necessary so as to conform to the current year''s presentation.

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Mar 31, 2012

A) The Company has only one class of shares referred to as Equity Shares having a par value of Rs.10. Each holder of Equity Shares is entitled to one vote per share. In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential and other payables exist currently. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

b) The Company has been sanctioned Debt Restructuring Scheme by CDR-EG. As per the Scheme promoters have pledged 6677100 Equity Shares to lenders with Voting Rights which is equivalent to 51% of their shareholding.

1) a) In the opinion of the Board, all the assets other than Non-current assets have a value on realisation in'the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet: The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

b) Balances-in Trade Payables, Trade Receivables and Short Term Loans and Advances are subject to confirmations, reconciliation and adjustments. In the opinion of the Management, adjustments, if any, on such confirmations/reconciliations will not have material impact on the Loss for the year.

2) a) Contingent Liabilities and commitments (to the extent not provided for): -

i) Contingent Liabilities :

- Disputed Drawback and Excise Duty (excluding interest): Rs.22.04 lacs (Previous Year Rs. 22.04 lacs)

- Disputed Income Tax Matters Rs. 353.14 lacs (Previous Year Rs. 441.25 lacs)

- Others: Rs.105.32 lacs (Previous Year Rs. 88.39 lacs).

ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 241.51 lacs (Previous Year Rs. 525.08 lacs); net of advances of Rs. 21.47 lacs (Previous Year Rs. 188.70 lacs),

b) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter into any such instruments for trading or speculative purposes.

3) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/ payable as required under the said Act has not been given.

4) Disclosure in respect of Related Parties persuant to Accounting Standard 18:

(A) UST OF RELATED PARTIES:

Related parties with whom company entered into transactions during the year:

(i) Associates

Perfect Knitters Limited Imperial Garments Limited Purav Trading Limited

(ii) Key Management Personnel and Enterprises {Having Common Key Management Personnel or their Relatives)

Key Management Personnel

Shri M.K.Patodia-Chairman & Managing Director

Enterprises / Entities having common Key Management Personnel

Patcot Company Perfect Cotton Co.

Standard Cotton Corporation

iii) Relatives of Key Management Personnel and their entities

Smt. Bimla Devi Chowdhary-Sister Smt. Sharada Devi Chowdhary-Sister Madanlal Purusottam Das (HUF)

With respect to compensated absences (leave entitlements), liability recognised in the Balance Sheet as on March 31, 2012 is Rs 25.51 lacs (Previous Year Rs.42.68 lacs).

5) In terms of Accounting Standard 17, the Company operates materially only in one business segment viz., yarn and has its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 21767.61 lacs (Previous Year Rs. 23957.97 lacs) and local saterof Rs. 14948.07 lacs (Previous Year Rs. 15681.69 lacs).

6) a) Certain Land, Buildings, Plant & Maeftnary and Electrical Installations were revalued as on 31st March 1993 on the basis of reports of Tppmwiwl valuer on market value / replacement cost basis using standard indices after considering the obeotoimnoe and age of individual assets.

7) The Company was using pre revised Schedule VI to the Companies Act, 1956 for the preparation and presentation of its financial statements upto the year ended 31st March, 2011. During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.

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Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 525.08 lacs (Previous Year Rs. 418.32 lacs); net of advances of Rs. 188.70 lacs (Previous Year Rs. 59.68 lacs).

2. Contingent Liabilities not provided for in respect of:-

Disputed demands for taxes, duties and other claims not acknowledged as debts:

Duty Drawback and Excise Duty : Rs.22.04 lacs (excluding interest) (Previous Year Rs. 18.69 lacs). Income Tax Rs. 441.25 lacs (Previous Year Rs.88.11 lacs)- Others: Rs.88.39 lacs (Previous Year Rs. 47.61 lacs).

3. a) Account of certain creditors, debtors and advances given are subject to confirmation and reconciliation/adjustment, if any. However, in the opinion of management, there would not be any material impact on the financial statements.

b) In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

4. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/ payable as required under the said Act have not been given.

5. EMPLOYEE BENEFIT PLANS

The following table set out the status of the gratuity plan as required under AS 15:

6. (a) Foreign Exchange difference (Net) credited to Profit and Loss Account Rs. 95.34 lacs (Previous Year: Rs. 497.63 lacs).

(b) In accordance with the concept of prudence, the Company has not recognized mark to market foreign exchange gain of Rs 57.85 lacs (Previous Year NIL) on derivative contracts entered into to hedge the foreign currency risk of future transactions and outstanding as at the Balance Sheet date.

(c) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter into any such instruments for trading or speculative purposes.The following are the contracts entered into by the Company and outstanding at the year end:

7. a) Interest charges for the year in Schedule 16 include Rs. 216.14 lacs related to earlier periods.

b) Interest on Others in Schedule -16 is net of interest income of Rs 53.05 lacs (Previous Year Rs. 44.72 lacs); tax deducted at source thereon Rs. 3.70 lacs; (Previous Year Rs. 4.31 lacs).

8. In terms of Accounting Standard 17, the Company operates materially only in one business Segment viz., Yarn and has its production facilities and all other assets located in India. Sales to external customers comprise export sales of Rs. 23957.96 lacs (Previous Year Rs. 15577.62 lacs) and local sale of Rs. 15681.69 lacs (Previous Year Rs. 10623.09 lacs).

9. The Company has been advised that it is eligible to set off lower of business loss / Unabsorbed depreciation even though adjusted with General Reserves in an earlier year. However, the Company has provided MAT tax liability of Rs.375 lacs without considering such adjustment and accordingly taken MAT tax credit.

10. Disclosure in respect of related parties pursuant to Accounting Standard 18: (A) List of related parties:

Related parties with whom company entered into transactions during the year:

i) ASSOCIATES

Perfect Knitters Limited Imperial Garments Limited GTN Engineering (India) Limited JEL Finance & Investment Limited Purav Trading Limited

ii) KEY MANAGEMENT PERSONNEL AND ENTERPRISES (HAVING COMMON KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES)

Key Management Personnel

Shri M.K. Patodia - Chairman & Managing Director

Enterprises / Entities having common Key Management Personnel Patcot co., Perfect Cotton Company Relatives of Key Management Personnel and their entities

Late Shri R.K. Patodia - Brother Smt. Bimla Devi Chowdhary - Sister Smt. Sharada Devi Chowdhary - Sister Madanlal Purusottam Das (HUF) Rajendra Patodia (HUF) Mahendra Patodia(HUF)

11. No commission is payable to any of the Directors of the Company, hence the Computation of Net Profit U/s. 198 / 349 of the Companies Act, 1956 is not disclosed.

12. Previous years figures have been regrouped and rearranged wherever necessary so as to conform to the current years presentation.

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Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and are not provided for: Rs. 418.32 lacs (Previous Year Rs. 300.35 lacs); net of advances of Rs. 59.68 lacs (Previous Year Rs. 41.97 lacs).

2. The Company is eligible for deferment of sales tax payable in respect of its Yam Processing Unit w.e.f. 20.08.1996 to 19.08.2010 for a period of 14 years, upper limit being Rs. 2233.82 lacs. The each years liability is repayable after 14 years from the year of availment of the benefit. The Company has deferred sales tax liability of Rs. 965.72 lacs upto 31.03.2010 (Previous Year Rs. 881.56 lacs).

3. Contingent Liabilities not provided for in respect of:

Disputed demands for taxes, duties and other claims not acknowledged as debts:

Duty Drawback: Rs. 18.69 lacs (including penalty of Rs. 3 lacs but excluding interest, if any)(Previous Year Rs. 18.69 lacs) Others: Rs.47.61 lacs (Previous Year Rs. 40.87 lacs).

4. The Company has been sanctioned Debt Restructuring Scheme by CDR - EG, which inter-alia, provides for interest rate reduction, lower working capital margins, re-schedulement of term loans, funding of Rs.2150 lacs by way of term loan for Capex, WCTL and Corporate loan. After close of the year, the promoters have brought in Rs.750 lacs by subscribing 60 lacs Equity Shares of Rs.10/- each with a premium of Rs.2.50 per share after obtaining necessary approvals from the Shareholders and SEBI. Most of the terms and conditions of the Scheme have been complied with.

5. Exceptional item represents Debit of Rs. 229.92 lacs towards VRS charges written off (PreviousYear-CreditofRs.297.89lacson account of power refund received/receivable from Maharashtra State Electricity Distribution Company Limited (MSEDCL) for Regulatory Liability Charges (RLC) collected in earlier years and debit of Rs. 74.26 lacs towards VRS charges written oft).

6. a) Account of certain creditors, debtors and advances given are subject to confirmation and reconciliation/adjustment, if any. However, in the opinion of management, there would not be any material impact oh the financial statements.

b) In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all other known liabilities is adequate and not in excess of the amount reasonably necessary.

7. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

8. EMPLOYEE BENEFIT PLANS

The following table set out the status of the gratuity plan as required under AS 15:

10.(a) Foreign Exchange difference (Net)credited to Profit and Loss Account Rs.497.63 lacs (Previous Year:Debit Rs. 760.83 lacs).

12.(a)Certain Land,Buildings,Plant &Machinery and Electrical Installati -ons were revalued as on 31 sl March,1993 onthe basis of reportsof approved valuer on market value /replacement cost basis usingstandard indices after consideringthe obsolescence and age of individual assets.

13.Interest on others in Schedule -17 is net of interest income of Rs.44.72 lacs (PreviousYear Rs.52,40 lacs);tax deducted atsource thereon Rs.4.31 lacs (PreviousYear Rs.8.66 lacs).

14. Interms of Accounting Standard 17,the Companyoperates materially only in one Business Segment viz.,Yarn and has its productionfacilities and all other assets located in India.Sales to external customers comprise export sales of Rs.15577.62 lacs (Previous Year Rs.12214.61 lacs)and local sales of Rs.10623.09 lacs (Previous Year Rs.7154.35 lacs).

18.Disclosure in respect of related parties pursuant to Accounting Standard 18:

A)List of related parties:

Related parties with whom Company entered into transactions during the year:I

i)ASSOCIATES

Perfect Knitters Limited Imperial Garments Limited

ii)KBY MANAGEMENT PERSONNEL AND ENTERPRISES (HAVING COMMON KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES) Key Management Personnel Shri M.K.Patodia -Chairman &Managing Director Shri M.Venkatesh -Director (Operations)(up to 28.05.2009) Enterprises /Entitles having common Key Management Personnel M.B.Credit Private Limited PatcotCo., Relatives of Key Management Personnel and.their entities Shri R.K.Patodia -Brother Smt.Simla Devi Chowdhary (Sister) Smt.Sharada Devi Chowdhary (Sister) Madanlal Purusottam Das (HUF) Rajendra Patodia (HUF) Mahendra Patodia (HUF)

21. In view of losses,no commission is payable to Managing Director and accordingly the Computation of Net Profit U/s.1 98 /349 of the Companies Act,1 956 for the payment of commission has not been furnished.

23. Previous years figures have been regrouped and rearranged wherever necessary so as to conform to the current years presentation.